Time Out 2, which should finally have a beta release in a few months, will have a totally new scheduler. But in the meantime, if you think Time Out isn't resetting when it should, you can enable some extra logging that records the idle state.

Enter the following command in Terminal:

defaults write com.dejal.timeout DebugScheduler YES

Then you can see the logging in Console.

Let me know if you need more assistance with this, or if the logging shows an issue (or you want help interpreting it).